'Megatrends' that’ll change where we put our money
INVESTORS looking for a slice of the future are being pointed towards six "megatrends", by one fund management firm. But other investment experts aren't so sure, saying the future is hard to predict.
Seer Asset Management is raising capital to establish a fund encompassing healthcare; agriculture, food and water; the rise of the individual; globalisation; energy and disruptive technology, believing these the sectors of the future.
Seer managing director Steve James says people could initially consider such an investment as a small part of their portfolio.
"We're all affected by these megatrends," he said. "People understand they are important, but for the average investor, it's a case of how do you get into these things?"
The 65 plus age group demographic is growing rapidly and Mr James believes there is important work happening in medical science and aged care.
"The (work on) cancer drugs affect us or people we know … if someone cures cancer, it's a great thing to be on the back of," he said.
Mr James believes technological and educational advances mean far more of the world's population are rising into the middle class.
"There is a demand for better wine, better food and more people are eating more protein in places like China," he said. "That's a massive thing."
Seer expects the demand for agricultural products and food will increase by 35 per cent and water 40 per cent by 2050, giving rise to new opportunities in land adaptation technology and opportunities with wastewater treatment plants.
Sectors like retail have already been shaken up by globalisation and Mr James expects the trend to continue.
"There are so many companies like Amazon, with a global distribution model and we are backing them," he said. "If you're making something special in Australia, you'd better think globally if you want to stay in the game."
Energy demand is on the rise and will be up 50 per cent by 2050, prompting research and technological advancements in natural resource productivity, according to Mr James.
Mr James believes there are endless horizons for disruption, when it comes to transforming the way industries and services operate.
"Look what milk powder did to the milk industry," he said. "There's disruption in medical, in property, in how the elderly are looked after … everywhere."
But investors starting out should be wary of jumping on a speculative bandwagon, said Ron Hodge, CEO of digital wealth adviser and information hub InvestSMART.
"It's very hard to predict the future," Mr Hodge said. "For the last decade they've been saying the world is starving, get into farming, but what happens when there's a drought?"
Mr Hodge said it's important that investors work out their own goals and go from there.
"If I'm a young person investing to get a house deposit, I shouldn't be putting all my money into healthcare, I should be looking at more conservative stock," he said.
He said portfolios should be broad and diversified, while a small portion could be used as a "punting fund" for speculative investment options.
"Those investments are fine, but have them on the side, maybe five to 10 per cent on your dad's BBQ tips" Mr Hodge said. "Make sure the rest of your money is safe, diversified, broad and in line with your risk appetite."